More than £66m was lost by people across Croydon, Lewisham, Hackney and Tower Hamlets in 2013 on high speed, high stakes gambling machines – according to a study last week.
The figures, produced by Campaign for Fairer Gambling, estimate that bookmakers across the four boroughs profited £66.3m from fixed odds betting terminals (FOBTs) in 2013.
The study shows that England’s more deprived areas have a far higher concentration of betting shops (and therefore FOBTs) than its richer areas, leading to suggestions that bookmakers have targeted the poorest areas with low income levels and high unemployment and crime rates.
Hackney and Tower Hamlets were in the top ten places where the most money was gambled and lost, while Lewisham was close behind. Croydon, despite having relatively large amounts of money gambled and lost due to its greater size, does not possess the same concentration of betting shops on its streets.
In Tower Hamlets there are 2,549 people to every betting shop license, in Hackney 2,747, in Lewisham 3,470 and in Croydon 4,017.
The distribution of shops provided by the study, which was compiled using the records of local authorities, has been acknowledged by the industry as correct, but there has been some dispute as to the accuracy of the other figures.
The disputed figures are the amount of cash inserted into the machines, the amount ‘gambled’ (meaning every single bet placed on the machine added up), and the amount grossed (profited) by the bookmakers.
The projections were compiled using a mixture of industry and regulatory estimates on how many FOBTs there are in each shop, which is just under four and how much profit each FOBT can be expected to make a week, almost £900.
The campaign uplifted the £896 average profit per terminal (PPT) by 33 per cent for machines in the London region, taking the estimate to £1,192. This figure stands in line with estimates of industry giants Paddy power, whose 2012 annual report showed a PPT of £1,210.
However, Neil Goulden, chairman of the Association of British Bookmakers, told the Guardian: “You cannot just use average figures to work on profits. Also in richer areas we see higher player participation. We do not target the poor. It is a question of where populations are.”
Critics say the machines are highly addictive and lead to crime and poverty, but it is difficult to produce hard evidence to support this argument.
FOBTs are also known to be a tool for laundering drug money, as criminals can insert their cash into the machines, gamble a small amount of money and then get a receipt, providing them with a potential explanation to police as to how an unemployed individual could have earned a large amount of cash.
In Hackney alone, the bookmakers profited an estimated £16.5m from the machines, as opposed to an estimated £7.8m in the more affluent borough of Kensington and Chelsea.
Hackney Council has fought to regulate the number of betting shops on high streets for the last five years, culminating last week with an application submitted to Parliament asking for local council’s to be given the power to subject the gambling venues to new planning restrictions.
Mayor of Hackney, Jules Pipe said: “Something needs to be done to stop betting shops cynically targeting deprived communities. Many act like financial vampires feeding off vulnerable people, fuelling addictions and other problems and adding to the difficulties of already hard-pressed families.
“Our campaign is not about banning betting shops. We acknowledge responsible and well-run businesses have a right to trade, but we need the tools so we can strike the right balance.”
The campaign led by Hackney Council has garnered the support 31 other London boroughs and 35 authorities elsewhere. Lewisham Council has been a leading campaigner on the issue in recent years and is firmly behind Hackney’s efforts.
Lewisham Deputy Mayor, Councillor Alan Smith, said: “The concentration of betting shops in our high streets is a major cause for concern. They tend to prey on vulnerable people, fuelling addictions and other problems and adding to the difficulties of already hard-pressed families. They also squeeze out other traders who could use the premises for something positive and constructive.
“In Lewisham we have seen a clustering of betting shops that we are concerned is being driven by increasing revenue from fixed odds betting terminals in the shops rather than traditional over the counter betting.”
An estimated £77m of cash was inserted into FOBTs by gamblers in Lewisham during 2013 across its 66 betting shops. As recently as November there was local opposition over the granting of permission for a new Paddy Power to open on Sydenham Road.
Smith continued: “We want betting shops to be given their own planning use class, as with nightclubs and casinos. This would mean residents and councillors could have a say over every application, and the potential impact a new betting shop may have on an area would become a key factor on whether or not it gets approved.”
The report will be presented in parliament this week with pressure growing on the government to protect residents from the dangers of FOBTs.